LIT1: Winter, H. (2020). The economics of crime: an introduction to rational crime analysis (2nd ed.).

Question 1

How does Winter distinguish the Economic approach to analyzing crime?

Answer 1

1. Because it requires costly resources to deter crime, the optimal amount of crime from a social perspective is very likely to be positive.
2. Economists typically assume that
   criminals are rational in the sense that they weigh the costs and benefits of their actions, and that crime can be deterred by policies that manipulate the probabilities of arrest and conviction, and that determine the severity of punishment.
3. If criminals themselves benefit from committing crime, these benefits may be
   considered as a social advantage of crime.

Question 2

What is the benefit of crime (Winter)

Answer 2

If criminal acts have offsetting benefits, it may be desirable to devote fewer
resources to crime deterrence.

F.e. Consider a crime that imposes a $10,000 cost upon society. If we think about this single crime in isolation, depending on our social policy objective we may want to devote no more than $10,000 in resources to deter it. Now assume that the criminal reaps a $7,000 benefit from committing the crime. If we count this $7,000 as a social benefit (after all, the criminal is a member of society), the net cost of the crime is only $3,000 (the $10,000 cost minus the $7,000 benefit). By counting the
criminal’s benefit, we may want to devote only up to $3,000 to deter the crime.

Unfortunately, this simple policy conclusion may be very difficult to implement in the real
world.

Question 3

What is Efficient Crime according to Winter?

Answer 3

There is also such a thing as
efficient crime.
If the benefit of a crime outweighs its cost, it may be in society’s best interest to encourage that crime.
- F.e., what if we change the numbers from above such that the criminal reaps a benefit of $12,000 instead of $7,000? Do we then actually gain $2,000 from the commission of that crime?

Now, it may be efficient for some crimes to occur even if it is costless to deter
these crimes

From a social policy perspective, then, in considering how to deal with a criminal’s
benefit from committing a crime there are two fundamental issues:
1. Identifying all the relevant trade-offs
2. Weighing the importance of each trade-off
That a criminal receives benefits from criminal activity is a fact, not an opinion.
However,
deciding whether the benefits a criminal receives should be traded
off against the costs of criminal activity in deciding social policy is subjective

Question 4

How can punishment of crime can be divided according to Winters?

Answer 4

1. The severity of the punishment
   Refers to the form of the ultimate sanction a criminal faces.
2. The certainty of punishment
   Takes into account the probabilities of apprehension and conviction.

Question 5

What is Winters economic model of crime?

Answer 5

To put it succinctly, economic models of crime predict the following:
an increase in the
expected punishment lowers the crime rate, while a decrease in the expected
punishment raises the crime rate.

Question 6

What is a Rational Criminal according to Winters?

Answer 6

A rational criminal is assumed to
weigh the costs and benefits of committing a crime, and commit the crime only if the benefits exceed the costs.

Thus, criminals respond to changes in their environment – if it becomes more costly to commit crime, less crime will be committed

Question 7

How to empirically analyse crime according to winters?

Answer 7

With empirical data, you can use a
regression analysis to estimate your model.
You can now distinguish between two different variables by controlling for all other variables.
You can also determine a certain effect with all else equal

When presenting the regression results for a specific variable of interest, it is common for researchers to discuss the:

Sign of the effect (positive or negative)
Magnitude of the effect (large or small in an absolute sense)
Statistical significance (typically, whether or not the magnitude is “different” from
zero).

Question 8

What are the 3 main categories for Empirical Crime Studies to divide variables in? Winter

Answer 8

1. Deterrence

Criminal activity is predicted to be inversely related to the expected punishment
a criminal faces. So a this would be a variable like the expected average prison
sentence.

2. Economic

It is usually predicted that criminal activity is inversely related to legitimate labor
market opportunities. So this would include income and employment variables.

3. Demographic

It is common in these types of studies to expect that criminal activity is more
prevalent amongst minorities and youth. So variables would include age and
race.

Question 9

What is the relation to Deterrence and the Certainty of Punishment according to Winter (2020)

Answer 9

An increase in the certainty of punishment (through the probability of conviction) provides a more effective deterrent than does an increase in the severity of punishment (through the length of the prison sentence).

Question 10

How can authorities manipulate the certainty of punishment?

Answer 10

One way for the authorities to vary the certainty of punishment is to
manipulate the probability of apprehension.
F.e. by increasing the police force.

Another way for the authorities to vary the certainty of punishment is to
manipulate the probability of conviction.
This can be done through changing criminal legislation.

Question 11

What do economist consider when trying to set a desired punishment for crime?

Answer 11

The expected punishment should be set based on a consideration of the costs and benefits of crime deterrence.
1. The cost imposed on society by the criminal act.
2. The benefit to the criminal of committing the act.
3. The cost of the resources used to maintain the expected punishment.

as a society, it is possible to spend too much on crime deterrence.